SECTION A

$[50$ MARKS$]$

Answer ALL questions in this section.

Read the following article and answer the questions which follow:

Whispers of 'tomorrow's Post Office' An analysis into the state of the SOE and its business rescue blueprint.

$17$ July $202304$:$18/$ By Tiaan Herbst $-$ The Southern African Advisory Company $[$SAAC$]$

Promise or pipe dream

In the sprawling tale of South African commerce, the South African Post Office $($Sapo$),$ an emblem of state enterprise, plays a part as enduring as the Cape of Good Hope. But today, that pillar, tracing its origins to the missive$-$stuffed satchels of $1847,$ teeters on the edge of financial ruin. This government stalwart, long$-$shouldering the nation's letters and parcels like a dutiful public postman, perilously dropped the mailbag. As with many narratives of long$-$established institutions, Sapo's saga is one steeped in irony $-$ its very longevity, in part, precipitating its current plight.

Sapo, like a quill$-$pen scribe in the age of email, grapples with the relentless tide of modernisation. Its traditional domain of letters and parcels has ebbed in the face of rising digital communication and unforgiving competitors. But this oldfashioned titan is not ready to be confined to the annals of history just yet.

Through the looking glass of this article, we investigate the mess of Sapo's present quagmire: contributing factors to its fiscal distress, the ramifications of the court's verdict to initiate business rescue proceedings, and the potential destinations this winding path might lead to$.$

Mirroring Sapo's circumstances, we reflect upon the journey of other South African state$-$owned enterprises $($SOEs$)$ that found themselves adrift in similar turbulent waters, serving up a comparative analysis to enrich our understanding of the business rescue environment.

Behind the stamp

Sapo has entered into business rescue proceedings in a move as sobering as the accounts that triggered it$.$ Once the lifeline of communication across the Rainbow Nation, the venerable institution has seen its fortunes fade faster than an old stamp. Now, it embarks on a financial Hail Mary intending to achieve a positive net financial and cash position$-$a tricky task, given its recent performance. Regrettably, to fully grasp the situation, we must dive into the details of the Sapo $2022$ Report published March $2023$:

With a rueful look back at the past year's spending, the board of directors took a grim decision during the $2022$ fiscal year. They approved the write$-$off of an eye$-$watering sum of R$648\mathrm{.}2$ million, classified as fruitless and wasteful expenditure. This significant drain on resources spans from the $2015/16$ fiscal year right through to the $2021/22$ fiscal year, an accumulation that has been met with a sobering nod of acceptance, as recommended by its financial management committee.

When it comes to revenues, Sapo has fumbled the delivery. Its ambitious annual performance target of attaining $100\%$ of the planned revenue foundered, achieving only $76\%.$ This left a gaping variance of $24\%,$ a